When two or more people wish to become co-owners in a property, they often create a written ownership agreement expressing the terms of the agreement. An ownership agreement often refers to real property, however, it may also apply to valuable personal property such as a race horse, coin collection or artwork. As long as the parties are of age, of sound mind and do not include any illegal or unconscionable terms in the agreement, they may generally negotiate the terms as they choose.
Negotiate the terms of the ownership agreement with the other parties. Although terms and conditions will vary depending on the circumstances, at a bare minimum you must decide how much capital each party will invest, the percentage of ownership and profit each party will have and who will manage the property and be responsible for maintenance.
Identify the parties to the agreement and the property at the beginning of the agreement. If the property is real property, a legal description should be included. For personal property, describe the property with as much detail as possible, including where the property is located.
Indicate what the purchase price of the property is and how the capital for the purchase of the property will be distributed. For example, if there are three parties to the agreement, one party may invest 50 percent of the purchase price, with the remaining two parties investing 25 percent each.
Specifically identify the ownership interest of each party. Do not assume that the percentage invested in the purchase equals the percentage of ownership. A 50 percent investment does not have to equal a 50 percent ownership if the parties agree otherwise.
Include who will be responsible for managing the property, which should encompass routine maintenance or care. In this section, you may also wish to identify who may pay bills or sign contracts necessary for the management and maintenance.
Designate how disputes will be handled and identify which state's law will govern disputes. You should also address whether or not a party has the right to sell her interest and whether or not the other parties have the right of first refusal, meaning the other parties have the option to purchase the interest before being sold to an outsider.
Sign and date the agreement in front of a notary public
If the property that is the subject of the agreement is real property, you should understand the definition of joint tenancy and tenancy in common. Property held as joint tenants gives rights of survivorship to the surviving party. You should specifically indicate which type you wish to create in the agreement.
Consult with an attorney if possible before signing any legal document.
Renee Booker has been writing professionally since 2009 and was a practicing attorney for almost 10 years. She has had work published on Gadling, AOL's travel site. Booker holds a Bachelor of Arts in political science from Ohio State University and a Juris Doctorate from Indiana University School of Law.